5 Keys to Successful Business Planning For a One-Person Shop

Lots of people dream about working for themselves. No wonder. Being a one-person shop has plenty of advantages, but it also has lots of challenges. One of the first mistakes sole proprietors make is plunging in without a plan. Your plan doesn't have to be long or complicated, but you absolutely, positively need one. A one-person business plan is crucial because it encourages you to

Be realistic about your business prospects. Bygoing into business for yourself, you can turn something you love to do into a money-making enterprise. Nothing could be cooler than that, right? But passion alone doesn't spell success. Your business plan must include a clear-eyed assessment of your capabilities, your competitors, and your potential customers.

Think carefully about how you'll charge for your products or services. Setting a price on what you do is one of the hardest things in a one-person shop. You can charge by the hour, by the project, by the product, or any combination. Make sure you talk about fees and costs up-front with your clients or customers. Also be prepared for special requests that clients ask of one-person business owners, including how you'll charge for the additional time and cost involved.

Keep your business and personal life separate. Being your own boss and setting your own hours are wonderful. However, to succeed in a sole proprietorship, you must plan your business as a business. If you plan to work at home, establish a space that is dedicated to your business enterprise. Keep your personal finances and business finances separate. Plan periodic reviews to assess how you're doing and what you need to change.

Stay connected. Working for yourself shouldn't mean being isolated. In fact, cultivating business networks when you're self-employed is especially important. Check out local business groups through your Chamber of Commerce. Use social networking to stay connected. And join professional associations, both to stay updated on news and trends and to meet and network with others in your field.

Set goals and track your progress. When you work for yourself, you may be tempted to think that you don't need to write down goals and set milestones for yourself. You do. Goals help motivate you and keep you on track. Setting milestones along the way will help you gauge your progress and alert you if you need to revise your plan. Put your goals and milestones into words. Write them down. Return to evaluate them on a periodic basis — at least once every six months.